It is good news for buyers and homeowners wishing to remortgage, mortgage rates look set to fall towards the end of the year and into 2023.
The money markets are already adjusting to the rapidly changing political outlook where stability for the UKs finances is essential after the disastrous mini budget.
While it is still uncertain how much the Bank of England will have to raise base rates in order to combat inflation, a recent speech suggested that the markets were overestimating the peak. This should lead to mortgage rates falling in the future.
Despite this, it is clear that the days of ultra-low rates are now over, and homebuyers will have to adjust to new rates at around 4-5%.
Current rates of around 6% greatly impact the buying power of new borrowers as lenders will be testing affordability at up to 9% mortgage rates which squeezes already tight budgets even further.
Mortgage rates falling to 4-5% next year will also help sellers, as the current reduction in buyer power will impact the asking prices that sellers are able to achieve while marketing their homes. 5% is also seen as a tipping point for house price reductions, so a quick return to 4-5% rate in 2023 will bring some stability to an uncertain housing market.
Peter Austin
Peter is a writer and photographer with a great interest in property, design, and the economy.
